Workers compensation insurance costs most Australian employers around 1% to 2% of their total wages bill. Rates range from roughly 0.2% for low-risk office work to 8% or more for heavy trades. Your exact cost depends on your wages, industry classification, claims history, and state or territory scheme.
As a broad guide, many Australian employers may see premiums around 1% to 2% of total payroll, but rates can be much lower or much higher depending on the industry, state, and claims history. A low-risk office business with $300,000 in wages may pay around $900 per year. A construction business with the same wages bill may pay $15,000 or more.
In several states this cover is known as WorkCover, and in others as workers compensation or workers comp. The names differ but the product is the same: a compulsory scheme that supports employees who are injured at work. Published average rates across the major state schemes for 2026-27 sit between roughly 1.3% and 2% of wages. Each state confirms its rate annually, and several have frozen rates for 2026-27.
For a full explanation of what workers compensation is, see upcover's guide to workers compensation insurance in Australia.
At a glance
| Question |
Short answer |
| How is it charged? |
A percentage of your total wages |
| What do most employers pay? |
Around 1% to 2% of wages |
| Low-risk office work |
Roughly 0.2% to 0.5% of wages |
| Construction and trades |
Roughly 3% to 8% of wages |
| Cost per employee (office) |
Often a few hundred dollars a year |
| Cost per employee (trades) |
Often a few thousand dollars a year |
| Minimum premiums |
Apply in some states regardless of wages |
| Most accurate cost |
A quote based on your wages, industry and state |
Swipe left or right to see the full table.
Your premium can change after year-end wage declarations, and employers with workers in more than one state may need to deal with more than one scheme. upcover arranges workers compensation insurance for eligible Australian employers.
How workers compensation premiums are calculated
The basic calculation follows this formula:
Total annual wages x Industry classification rate +/- Claims history adjustment = Estimated premium
For example, a retail business paying $400,000 in annual wages with an industry rate of 1.5% and no claims adjustment would pay an estimated premium of $6,000 per year. A construction business with the same wages at 5% would pay $20,000.
Each part of the formula works like this.
Payroll size
Premium starts with total wages for the year, including salaries, overtime, superannuation contributions, bonuses, commissions, and some allowances.
Work type classification
Your business is assigned a classification code based on its primary activity. Higher-risk work attracts a higher rate. A bookkeeper and a scaffolder are in different risk categories, and their rates reflect that.
Claims history
Claims frequency and cost can affect pricing, particularly in experience-rated schemes. Employers with fewer claims and strong return-to-work outcomes may face less premium pressure over time, depending on the scheme. Early injury reporting, safe work practices, and structured return-to-work support can help at renewal.
State or territory scheme
Where your workers are based determines which scheme applies. The same business operating in Queensland and South Australia would pay different base rates. If you employ workers in more than one state, you may need policies in each jurisdiction.
Example workers compensation cost by industry
For a business with $300,000 in annual wages, here is what the cost may look like across different risk levels.
Office-based work
Accounting, IT consulting, legal services, financial planning, administration. Rates typically sit around 0.2% to 0.5% of payroll. Estimated cost: roughly $600 to $1,500 per year.
Retail and hospitality
Shop assistants, cafe and restaurant staff, hotel workers. Rates typically sit around 1% to 2%. Estimated cost: roughly $3,000 to $6,000 per year.
Construction and trades
Builders, electricians, plumbers, concreters, roofers, scaffolders. Rates can sit between 3% and 8%, sometimes higher for demolition or heavy earthworks. Estimated cost: roughly $9,000 to $24,000 per year.
Transport and logistics
Couriers, truck drivers, delivery drivers, warehouse workers. Rates typically sit around 2% to 5%. Estimated cost: roughly $6,000 to $15,000 per year.
These examples are indicative only. Actual premiums depend on your state scheme, specific industry code, wages, claims history, and insurer or scheme rules.
Some states apply minimum annual premiums regardless of payroll. For example, NSW has published a minimum of $240, Victoria has published a minimum of $400 for 2026-27, and South Australia has published a minimum of $200. Check the relevant state scheme for current figures.
Want a figure based on your wages, industry, and state? Start with upcover's workers compensation insurance page.
How much does workers compensation cost per employee?
Workers compensation is priced on your total wages, not per person. You can still estimate a per-employee cost by applying your industry rate to one worker's wages.
Here is how that looks using the indicative rates above. An office employee on $75,000 a year at a 0.4% rate works out to around $300 a year. A retail or hospitality employee on $60,000 at 1.5% works out to around $900 a year. A construction worker on $90,000 at 4% works out to around $3,600 a year.
These are worked examples only, not quotes. Your actual rate depends on your state scheme, industry classification, and claims history. Wages for premium purposes usually include superannuation, overtime, and some allowances, so the wages base per employee is often higher than base salary.
Workers compensation cost by state
Each state sets or regulates its own average premium rate. Here are the published average rates for the 2026-27 policy year. Individual employer premiums vary based on business and risk factors.
| State or territory |
Published average rate 2026-27 |
Status |
| New South Wales |
1.99% target collection rate |
Frozen by legislation for 2026-27 and 2027-28 |
| Victoria |
1.8% |
Held for a fourth consecutive year |
| Queensland |
1.343% ($1.343 per $100 of wages) |
Frozen for a second consecutive year |
| South Australia |
1.85% |
Held for a fourth consecutive year |
| Western Australia |
Recommended rates by industry class |
Cover arranged through approved insurers |
| Tasmania, ACT, NT |
Insurer-set or suggested rates |
Varies by industry and insurer |
Swipe left or right to see the full table.
New South Wales
NSW has legislated a premium rate freeze covering the 2026-27 and 2027-28 policy years, part of the workers compensation reforms passed in February 2026. icare has confirmed the 2025-26 industry classification rates are maintained for 2026-27, with the scheme's expected premium target collection rate held at 1.99%. Individual premiums can still change with wages, business activity, and claims experience. The minimum premium remains $240.
Victoria
WorkSafe Victoria has confirmed the average premium rate for 2026-27 is 1.8% of rateable remuneration, unchanged for a fourth consecutive year. The minimum premium for 2026-27 is $400. Individual employer premiums vary with industry rates and claims performance.
Queensland
WorkCover Queensland has held its target average premium rate at $1.343 per $100 of wages for 2026-27, the second consecutive freeze. Queensland continues to publish one of the lowest average rates of any state scheme. Individual premiums depend on wages, industry, and claims performance.
South Australia
ReturnToWorkSA has maintained the average premium rate for 2026-27 at 1.85%, the fourth consecutive year at this level. Many sole operators and small businesses pay only the minimum premium, which is $200 for 2026-27, plus GST and the WHS fee.
Western Australia
WorkCover WA publishes recommended premium rates by industry class each year. Employers arrange cover through approved insurers, so final pricing can vary.
Tasmania, ACT, and Northern Territory
These schemes use insurer-set or suggested rates, so pricing varies by industry, insurer, and claims history. Check the relevant authority or use a broker to confirm current pricing.
Why your premium may be higher or lower than average
Six factors drive the difference between what you pay and the average rate for your state.
- Industry classification is the single biggest variable. A concreter pays a different rate from an IT consultant because the injury risk is different.
- Total wages declared: More wages mean a higher base premium. Wage declarations should include all categories required by the relevant scheme.
- Claims history: Frequent or expensive claims may increase premiums in experience-rated schemes. A strong safety record may help at renewal, depending on the scheme.
- Return-to-work outcomes: Helping injured workers return to suitable duties earlier can reduce claim duration. Shorter claims may help reduce premium pressure over time, depending on the scheme.
- Contractors and deemed workers: Some contractors may need to be included in wage declarations depending on state rules. This increases the wages base your premium is calculated from.
- Wage estimate accuracy: Your first premium is based on estimated wages. If actual wages are higher at year-end, you may receive an adjustment invoice. If lower, you may receive a refund or credit.
How to calculate your workers compensation cost
There is no single national calculator because each state scheme prices differently. You can build a reliable estimate in three steps.
- Step 1, add up your expected annual wages, including superannuation, overtime, bonuses, and allowances your scheme counts as wages.
- Step 2, find your industry classification rate. Each scheme publishes its rates, and your renewal notice states yours.
- Step 3, multiply wages by the rate, then allow for any claims history adjustment and your state's minimum premium.
For example, $500,000 in wages at a 1.5% industry rate gives an estimated cost of $7,500 a year before any adjustments. Some state schemes also publish their own online premium estimators, which use the same inputs.
Many employers pay in monthly instalments rather than one annual payment, depending on the scheme or insurer. Paying annually in full attracts a discount in some states.
What information do you need for a workers compensation quote?
To get a quote, you generally need:
- ABN and business name
- State or territory where workers are based
- Number of workers
- Estimated annual wages
- Industry or work type
- Business locations
- Claims history
- Whether you use contractors
- Preferred start date
Having these details ready makes the quoting process faster. If you employ workers in more than one state, you may need quotes for each jurisdiction.
How upcover can help
upcover arranges workers compensation insurance for eligible Australian employers with selected insurers and underwriters. Policies arranged through upcover span small teams through to employers with large workforces, on both annual and monthly payment plans. Depending on your state and business, you may be able to compare cover options and arrange a policy online.
For related guides, see workers compensation insurance in Australia, is workers compensation compulsory, and employers liability insurance.
upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.
Frequently asked questions
How much does workers compensation insurance cost in Australia?
Premiums are calculated as a percentage of total wages. For most employers, rates sit around 1% to 2% of payroll. Low-risk office work may cost 0.2% to 0.5%, while construction and heavy trades may cost 3% to 8%, and sometimes higher for demolition or heavy earthworks. The actual cost depends on your state, industry code, wages, and claims history.
How much does WorkCover cost per employee?
Often a few hundred dollars a year per office employee and a few thousand per trades employee. WorkCover and workers compensation premiums are charged on total wages, so the per-employee cost is the employee's wages multiplied by your industry rate. An employee on $75,000 at a 0.4% office rate costs around $300 a year, while a construction worker on $90,000 at 4% costs around $3,600.
How are workers compensation premiums calculated?
Premiums are based on estimated wages multiplied by your industry classification rate, adjusted for claims history and state scheme rules. Wages include gross pay, super, bonuses, commissions, and allowances.
What is the average workers compensation rate in Australia?
Published average rates for 2026-27 sit between about 1.3% and 2% of wages across the major state schemes. Victoria is 1.8%, South Australia is 1.85%, Queensland is 1.343%, and NSW has held its 1.99% target collection rate under a legislated freeze. Your actual rate depends on your industry and claims history.
Why does workers compensation cost more in some industries?
Higher-risk industries have more frequent or more severe workplace injuries. Construction, transport, and manufacturing typically attract higher rates than office-based or professional services work.
Does claims history affect my workers compensation cost?
Yes. In many schemes, employers with fewer and less costly claims generally pay lower premiums over time. For medium and large businesses, experience rating compares your claims performance against your industry average.
Do contractors affect my workers compensation premium?
Some contractors may be treated as workers depending on state rules and the nature of the engagement. If a contractor is deemed a worker, their wages may need to be included in your declaration, which increases the wages base your premium is calculated from.
How do I get a workers compensation quote?
You need your ABN, estimated wages, number of workers, industry type, state, and claims history. upcover arranges workers compensation insurance for eligible Australian employers. Start with upcover's workers compensation insurance page.
The information in this article is general in nature and provided for informational purposes only. It does not constitute personal insurance, legal, employment, tax, or business advice. Workers compensation rates, premiums, and calculation methods vary by state and territory and can change. Rate data is sourced from published state scheme information and official government announcements for 2025-2027. Actual premiums depend on your state, industry code, wages, claims history, and insurer. Always confirm current rates with the relevant state or territory authority or insurer. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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